Sanders Endorses “Green TVA” Approach to Green New Deal

Bernie Sanders released his Green New Deal proposal today. Fitting the issue, it is a very long proposal with lots of different parts. One of those parts, which makes up a huge share of the actual activity proposed by the plan, is to have the federal government use its existing electricity production companies — most famously the Tennessee Valley Authority (TVA) but also the four Power Marketing Administrations (PMAs) — to massively build out renewable energy production in the US.

Specifically Sanders’s plan says that:

Currently, four federal Power Marketing Administrations (PMAs) and the Tennessee Valley Authority generate and transmit power to distribution utilities in 33 states. We will create one more PMA to cover the remaining states and territories and expand the existing PMAs to build more than enough wind, solar, energy storage and geothermal power plants. We will spend $1.52 trillion on renewable energy and $852 billion to build energy storage capacity. Together, with an EPA federal renewable energy standard, this will fully drive out non-sustainable generation sources.

It also says that:

The renewable energy generated by the Green New Deal will be publicly owned, managed by the Federal Power Marketing Administrations, the Bureau of Reclamation and the Tennessee Valley Authority and sold to distribution utilities with a preference for public power districts, municipally- and cooperatively-owned utilities with democratic, public ownership, and other existing utilities that demonstrate a commitment to the public interest. The Department of Energy will provide technical assistance to states and municipalities that would like to establish publicly owned distribution utilities or community choice aggregation programs in their communities. Electricity will be sold at current rates to keep the cost of electricity stable during this transition.

Although the plan itself does not appear to include this number, the Vox coverage of the plan says that, over 15 years, it intends to raise $6.4 trillion of its total $16.3 trillion price tag from electricity sales made by these state-owned enterprises. For comparison, the TVA had revenues of $11.1 billion in 2018. So we are talking about an expansion in federal electricity production that is around 30 times larger than the current TVA.

The Sanders plan bears a striking resemblance to the Green TVA plan released earlier this year by People’s Policy Project. In that proposal, I argue that the federal government should decarbonize the electricity produced by the TVA and use the TVA to build out renewable energy across the whole country, selling it into the grid to help pay for the upfront capital costs of building out enough clean electricity production to serve our energy needs. The Sanders proposal follows this basic blueprint but uses the TVA and the PMAs, not just the TVA.

The Sanders proposal also promises to sell the electricity produced by these new federally-owned renewable energy installations “at the current rates to keep the cost of electricity stable during this transition.” This kind of subsidy is also suggested in our Green TVA plan.

The Sanders approach on this is both novel among Green New Deal proposals and smart. The TVA and the PMAs are very effective and efficient producers of electricity and there is no reason why they cannot be used to directly build out the renewable energy capacity that we need. We can make efforts to induce private actors to invest in the kind of energy we need, but we should not be at their mercy.

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